Whitfield L. Knapple, MD, FACG
Chair, ACG National Affairs

On Wednesday, May 24th, the Congressional Budget Office (CBO) released the “score” or cost estimate and policy impact of the American Health Care Act (AHCA), the bill that the U.S. House of Representatives passed on May 4th.  This bill repeals the Patient Protection and Affordable Care Act (ACA), and make changes to coverage requirements and Medicaid.  ACG provided membership with a summary this bill.

CBO estimates that, in 2018, 14 million more people would be uninsured, compared with the current law. By 2026, that figure would rise to 23 million. CBO projects the legislation would reduce federal deficits by $119 billion over 10 years. That amount is $32 billion less than the savings for the previous version of AHCA that CBO scored on March 23rd.  However, it is important because that estimate clearly meets the $2 billion of minimum projected savings the bill needed in order to be taken up by the Senate via budgetary reconciliation rules.  This allows the Senate to pass the bill by a simple majority, however, the score clearly makes things even more difficult for Republican leadership, who are trying to preserve 50 votes needed to pass the bill (via reconciliation).  It remains unlikely that the Senate will able to pass House version as is, but instead, will try to craft a proposal created by a work group of Republican senators (and a few Democratic senators in Republican-leaning states).   This is a very difficult task for Majority Leader Mitch McConnell (R-KY) and President Trump.  The official CBO now puts Senate Republicans on the clock.

Some brief points on the CBO score:

  • 14 million fewer people will be insured one year after passage.
  • 23 million fewer will be insured in 10 years.
  • The AHCA would cut spending in Medicaid by $834 billion.
  • Premiums will go up in 2018 and 2019. After that, there will be significant variation, depending on whether someone lives in a state that opts out of key ACA insurance rules (essential health benefits, pre-existing conditions requirements).
    • In states that waive some ACA coverage rules, premiums would decline by 20 percent over a decade, compared to current law.
  • 1 out of 6 Americans will live in an area with an unstable insurance market in 2020, where sick people could have trouble finding coverage. 5 out of 6 would have access to relatively stable markets.
  • Poorer, older Americans who are too young for Medicare may have the highest premiums. For example, the average 64-year-old earning just above the poverty line could have to pay about 9 times more in premiums.
  • In 2026, 51 million people under age 65 would be uninsured — almost twice as many as the 28 million who would have lacked coverage under the ACA.
  • The bill will save $119 billion, which is $32 billion less than a previous version of AHCA, but enough to meet Senate budget reconciliation rules.
  • It repeals $664 billion worth of taxes and fees that were in the ACA.

U.S. Senators to watch: Sen. Bill Cassidy, MD, FACG (R-LA) and Sen. Susan Collins (R-ME) have an alternative plan that seems to be gaining momentum during works groups sessions.  According to pundits, the following U.S. senators are also key to successfully passing health reform legislation: Shelley Moore Capito (R-WV), Lindsey Graham (R-SC), Dean Heller (R-NV), Dan Sullivan (R-AK), as well as democratic Sens. Tom Carper (D-DE), Joe Donnelly (D-IN), Heidi Heitkamp (D-ND), Joe Manchin (D-WV), Claire McCaskill (D-MO)… and ironically, Hillary Clinton’s running mate Tim Kaine (D-VA).  Sen. Angus King (I-ME) is on the pundits’ watch list, too.

ACG is calendar watching:  Negotiating Leverage or Perfect Storm?  It is worth noting that the bills and draft focus on insurance coverage related issues and not physician reimbursement related issues.  ACG is working with like-minded organizations and advocating members of the U.S. Senate for preserving pre-existing conditions protections and removing cost-sharing barriers for preventive services.  ACG is also watching the calendar: June and July are very important months.  If the Senate and House Republicans cannot come to some agreement by the August recess, the prospects of ACA repeal get more difficult, especially with FBI/Russia related hearings expected soon.  Congress returns in September and must deal with federal government funding and the FY 2018 budget.  House Republicans are already meeting about these issues, sending a message that we could be hearing a lot more about intra-party disagreements on how to keep the Federal Government open, whether to avoid sequestration cuts in other agencies, while possibly navigating ACA repeal though Congress.  However, Congress must also reauthorize the Medicaid children’s health insurance program (CHIP).  The Medicare Access and CHIP Reauthorization Act of 2015 (MACRA) extended CHIP allotments through FY 2017.  This may provide some leverage over Democrats to possibly make some fringe health reform changes.  It could also provide another opportunity for Democrats to stand back and watch Republicans take more public relation blows.

The curious case of ACA subsidies: On Monday, the Trump administration and U.S. House of Representatives sought another 90-day delay in a lawsuit over ACA insurance subsidies.  The lawsuit, House v. Price, centers on ACA’s insurance cost-sharing program, which reimburses health insurers to reducing costs of premiums and copayments for certain low income individuals.  In late 2014, former House Speaker John Boehner filed a lawsuit against the Obama Administration, arguing that ACA’s cost-sharing program was never legally funded in the ACA, and was illegally financed by the HHS.  The U.S. House had never been allowed to sue the White House before.  In 2015, the U.S. District Court ruled the House could sue and that the Obama Administration had been illegally funding the subsidies.  The Court ruled that the payments could continue pending appeal.  The Obama administration appealed to the D.C. Circuit Court of Appeals.  President Trump’s election victory changed the lawsuit into the Republican-controlled U.S. House vs. a Republican-controlled White House.  The parties first sought a delay in February 2017.  The subsidies have already been paid for May.  However, as Republicans try to repeal the ACA, insurers say that without the $7 billion in subsidy payments, they may be forced to leave more insurance markets across the U.S.

If the Trump administration drops the appeal, the subsidy payments may stop. Insurance companies are allowed to leave the exchanges as soon as the payments end.  Dropping the appeal also means that the decision to allow the U.S. House to sue the White House now has precedent (making the mid-term elections very important).  If, however, the Trump administration allows the appeal to move forward, legal analysts say that the U.S. House would lose the appeal, perhaps then creating a rift between President Trump and House Republicans as House Republicans gear up for the 2018 mid-term elections.  The court case may give Republicans some leverage over insurers, as Republicans finalize ACA repeal plans.  Or, insurers may leave markets, causing Republicans to act quickly, thereby forcing Republicans to make quick, easier to pass fringe ACA reforms.

But wait, there’s another federal court case looming:  On Thursday, May 25th, a federal court ordered the Trump administration to release over 13,000 pages of internal records related to repealing the ACA and health care reform discussions.  This is pursuant to a non-profit organization’s recent Freedom of Information Act (FOIA) requests.  The “American Oversight” organization sent FOIA requests in March 2017 but also asked a federal court for expedited processing.  The U.S. District Court in D.C. agreed, and ordered the Trump Administration (HHS and OMB) to release 1/3 of the communications by June 30th, another 1/3 by July 31st, and the remaining documents by September 5th.  While there may not be much substance to these internal documents, it could provide a lot of fodder for the media and public relations during a crucial time in garnering support for the ACA repeal legislation.

President Trump Releases Controversial FY 2018 Federal Budget: Key Takeaways and Tidbits

On Tuesday, May 23rd, President Trump officially released the fiscal year (FY) 2018 proposed Federal Government Budget.  This is a blueprint, suggested proposal for Congress that U.S. Presidents and the Office of Management and Budget (OMB) release annually.  Congress determines what the FY budget actually is each year, so it came to no surprise when policymakers quickly distanced themselves from President Trump’s recent proposed budget.  However, these proposals are important because they provide ACG members with some insight into a president’s priorities and policy goals.  For example, HHS would receive a $12.4 billion cut to discretionary funding.  This includes major reforms in Medicaid, drastically reducing the budget of the office responsible for the “Meaningful Use” program, and significant cuts to the National Institutes for Health (NIH) as well as the Centers for Disease Control and Prevention (CDC).  The numbers: Medicaid would be cut by $610 billion over the next decade, the Office of the National Coordinator (health IT) would be cut $22 million next year, NIH by $5.7 billion next year, and CDC by $1.3 billion next year.  CMS would get a $2.9 billion increase.

A look into President Trump’s views on Medicaid: It is worth noting that the $610 billion cuts over 10 years for Medicaid would be in addition to the $834 billion in cuts over 10 years via U.S. House-passed AHCA.  States would receive fixed funding from the Federal Government with new flexibility to administer their Medicaid programs.  This perhaps signifies an attempt to align the budget with the House-passed AHCA.

ACG will take the fight to Capitol Hill again: The President’s proposes to reduce NIH and CDC’s budget by nearly 20%.  ACG Governors were on Capitol Hill in April, along with other organizations, and successfully urged Congress to oppose the Trump Administration’s FY 2017 cuts to the NIH. ACG will continue to urge Congress to oppose these cuts to the NIH and CDC.

Everything is rosy when you can choose the baseline: When presidents submit their annual FY budget to Congress each year, they get to use an estimated annual gross domestic product (GDP) growth in the projections.  Projected growth is important because it could mean more federal income tax revenue, less spending, and perhaps a balanced budget.   Naturally, administrations usually provide a rosy outlook when submitting their annual FY budgets to Congress.  President Trump assumes a 2.3% GDP growth in 2017, then increasing to 3% in 2021+.  As a comparison, the CBO projects 1.9% in 2017+, according to pundits.

Whitfield L. Knapple, MD, FACG

Chair, ACG National Affairs Committee